This paper studies the impact of the increased rigidity on macroeconomic fluctuations. The author uses this evidence to test the validity of two major "Keynesian" explanations. The first is the conventional sticky wage/sticky price explanation that suggests that the increased nominal rigidity,...

Using industry data, this paper investigates the determinants of the response of real output to aggregate demand shocks across industries of the U.S. economy. The purpose of this investigation is to verify the empirical validity of two competing explanations for this response: a new classical...

This paper examines determinants of private consumption in a sample of developing countries. The empirical model includes income, a proxy for the cost of consumption, and the exchange rate. Anticipated movements in these determinants are likely to trigger adjustment in planned consumption, while...

This paper examines the asymmetric effects of exchange rate fluctuations on real output and price in developing countries. The theoretical model decomposes movements in the exchange rate into anticipated and unanticipated components. Unanticipated currency fluctuations determine aggregate demand...

The main purposes of this article are 3-fold. First, we construct measures of real and nominal effective exchange rates for 14 Middle East and North African countries over the 1970-2004 period. Second, we test the validity of the Purchasing Power Parity (PPP) by applying the ADF and KPSS tests...

Using data for a sample of 50 developing countries, the empirical investigation evaluates determinants and implications of asymmetric price flexibility. Price inflation is characterized by high flexibility to adjust towards full equilibrium. Further, price inflation accelerates flexibly with...

The main purpose of this paper is to determine empirically whether currency depreciation is expansionary or contractionary in Asian countries. It is argued that by disrupting the operation of the financial sector and by introducing uncertainty among consumers and investors, currency depreciation...

Over a sample of nineteen industrial countries, more variable aggregate demand and/or higher mean inflation attenuates (augments) the effect of aggregate demand shocks on real output growth (wage and price inflation) while having no effect on the response of the real wage to such shocks. In all...